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Tencent’s Survey: 51% of Top Chinese Economists Support a Central Bank Digital Currency

A recent survey conducted by Tencent’s fintech think tank reveals that top economists in China are divided over the impact of blockchain technology and whether the central bank should issue a state-backed digital currency, according to Jiemian News.

Tencent’s fintech think tank on Wednesday unveiled the results of a report based on a survey of 103 chief economists in brokerage firms and investment banks, analysts of official organizations, and professors in universities.

When it comes to blockchain technology, the survey showed 33% of Chinese economists hold a positive attitude towards the development of the emerging technology that underlies cryptocurrencies like bitcoin; 32% believe the technology is not-so-important; 19% says blockchain may not make a meaningful difference to society.

The report indicated Chinese economic experts cast doubt over blockchain’s the development trend and the future of its applications, even though both central and local governments in the country issue policies to encourage blockchain development and invest heavily in the technology, aspiring to become a front-runner in this field.

As for the issuance of a central bank digital currency (CBDC), Tencent’s survey found 51% of respondents support the initiative while 40% oppose the plan to issue a state-backed digital currency. It signals the future of a CBDC faces multiple uncertainties due to CBDC supporters roughly equal in size to the opposition camp.

The report noted that with the rise of digital and electronic payments in China, different kinds of tokes are used to varying degrees and a decrease in cash transactions poses a threat to tech-savy banks. Therefore, the issuance of a CBDC cannot evade the impact of digital currencies.

The People’s Bank of China, the country’s central bank, is developing its own digital currency which is expected to drive down transaction costs, increase efficiency of monetary policies and extend financial services to rural areas. But it remains unclear when the state-backed digital currency will be issued.

The above-mentioned findings are just part of this survey which covers economists’ insight into the country’s economic development and investment outlook in 2019.